Reinventing VimpelCom
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Performance transformation

Increase efficiency with a new operating model.

Performance transformation

VimpelCom's performance transformation objective is to build a new global organizational operating model that will bring together all its operating companies and its HQ to truly operate as one group. VimpelCom will achieve this by finding global and regional synergies for transactional services, consolidating its global expertise, as well as rethinking and upgrading the way networks and customer services are managed. By learning business processes such as supply chain and procurement, and by making them truly global, VimpelCom will be better placed to capture economies of scale. The new business model is equipped with strong capabilities to continuously drive profitability in order to function as a value creation engine for the future, which will enable VimpelCom to considerably reduce its cost base. The freed-up funds will be the base for a major investment program, in order for the Company to reinvent itself as the most streamlined digital operator in the world.

Strategic partnership approach

Since establishing its new approach, which was launched at the Performance Transformation Supplier Days event in Amsterdam in November 2015, VimpelCom has signed 21 relationship agreements and kicked off a series of global tenders, successfully setting the direction for future partnerships. In addition, seven incumbents have been moved to central price agreements, which enable substantial savings per year through best-in-class pricing, and further benefits will come from reduced foreign exchange exposure. As an example, in 2014, less than 10% of our purchasing was done globally. By the end of 2015, this number had grown to 35%. With the new operating model in place, we will be able to do 70% of our purchasing globally in 2017. The objective of the Supplier Days was to create new, durable and strategic relationships with trusted partners in line with our transformation program as we shift to a central operating model. "As a cornerstone of performance transformation, Supplier Days give us an opportunity to define and agree ‘new rules of the game' with our main suppliers," said Dietmar Dresp, Group Director Indirect Procurement.

2015 Milestones

  • Set-up of performance transformation team across the footprint
  • Focus on simplification, digitalization and globalization of operations
  • Reduction in 2015 Capex/revenues ratio by ~3 p.p. to 18.2%
  • ~40% of USD 750 million cash flow improvement target already delivered